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Reports Malaysia

Malaysia stock market and companies daily report (January 10, 2014)

January 10, 2014, Friday, 06:24 GMT | 01:24 EST | 10:54 IST | 13:24 SGT
Contributed by Shares Investment

Malaysia’s Industrial Output Beats Forecast
- Malaysia’s industrial output, as measured by the industrial production index (IPI), rose 4.4 percent in November 2013 from a year earlier, according to the Statistics Department. This figure had beaten a Reuters survey median market forecast of a 2.9 percent expansion.
- All three components of the IPI expanded with the manufacturing, mining and electricity production components growing 4.1 percent, 4.8 percent and 6.1 percent respectively.
- Cumulative IPI growth for the 11 months to November came to 2.6 percent and in seasonally adjusted terms, the IPI in November 2013 increased 3.5 percent month-on-month.
Significance: Malaysia’s industrial output exceeded expectations as a slowly improving outlook for exports supports the mining and electronics sectors. The country’s exports are expected to continue riding on the recovery of the global economies.
Hibiscus Maintains Stake In Lime With RM26.4m Investment
- Hibiscus Petroleum will inject US$8.1 million (RM26.4 million) worth of capital into Lime Petroleum, a joint entity to maintain its 35 percent stake in Lime as all Lime shareholders will subscribe, based on their respective equity interests, to a total of 23 million shares in Lime.
- Earlier, Lime had announced that it began drilling an exploration well in Block 50 Oman, which is the second in the two-well drilling programme after the suspension of the first well for safety reasons. The total estimated cost of the second exploration well is expected to be approximately RM83 million, to be fully funded by cash already available.
- Lime has interests in four companies that hold the rights to four oil and gas concessions in the Middle East. Lime also holds a 100 percent stake in Lime Norway, which has interests in seven production licences in the Norwegian continental shelf.
Significance: There have been concerns that the company might have to write off the asset given the setback and RHB Research noted that its shares could be worth as low as RM1.18 if the drilling campaign in Oman Block 50 failed. However, the impairment assessment is still under evaluation and is too premature to conclude and Hibiscus assured that no costs will be written off until the area is abandoned.
Guan Chong Aims For RM100m Revenue From Its New Factory
- Guan Chong is targeting a revenue of up to RM100 million from its new industrial chocolate factory in Port of Tanjung Pelepas, Johor, for its financial year ending December 2014.
- The new chocolate manufacturing facility, worth RM55 million, commissioned in September last year and is designed to produce 50,000 tonnes a year. The initial production capacity of the facility is 4,000 tonnes and it aims to increase to 10,000 tonnes in the first phase by early next year.
- Guan Chong is positive that the facility’s production will be able to impact its earnings, given that a production of 500 tonnes and above per month will see margins come into the picture.
Significance: Industrial chocolate is expected to be a significant contributor and represents a potentially substantial revenue stream. According to Euromonitor International, there is a growing appetite for chocolate, with global sales expected to gain 2 percent annually in the next two years and strong demand from emerging markets.